UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2000
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to _________
Commission File No. 0-29015
INTERNET GOLF ASSOCIATION, INC.
(Name of Small Business Issuer in Its Charter)
NEVADA 84-0605867
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
24921 Dana Point Harbor Drive, Suite B-200
Dana Point, California 92629
(Address of Principal Executive Offices) (Zip Code)
(949) 493-9546
(Issuer's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
(None)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, par value $0.001
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----
Indicate the number of shares outstanding of each of the issuer's class of
common stock as of the latest practicable date:
Title of each class of Common Stock Outstanding as March 31, 2000
----------------------------------------- -----------------------------
Common Stock, $0.001 par value 31,396,250
Transitional Small Business Disclosure Format (check one):
Yes No X
------
1
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TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets at March 31, 2000 (Unaudited) and December 31, 1999.
Consolidated Statements of Operations (Unaudited) for the three months ended
March 31, 2000 and for the period from inception on February 4, 1999 to March
31, 2000.
Consolidated Statements of Cash Flows (Unaudited) for the three months ended
March 31, 2000 and for the period from inception on February 4, 1999 to March
31, 2000.
Notes to Interim Financial Statements (Unaudited) at March 31, 2000.
Item 2. Plan of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
2
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED BALANCE SHEETS
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ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MARCH 31, 2000 DECEMBER 31, 1999
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,201 $ 3,775
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . 22,705 22,705
Other current assets . . . . . . . . . . . . . . . . . . . . . 1,173 652
------------ -------------------
Total current assets . . . . . . . . . . . . . . . . . . . . 34,079 27,132
------------ -------------------
Property and equipment, at cost:
Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . 18,935 18,935
Computers. . . . . . . . . . . . . . . . . . . . . . . . . . . 15,118 15,118
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . 1,195 1,195
------------ -------------------
35,248 35,248
Less accumulated depreciation. . . . . . . . . . . . . . . . . (9,668) (4,616)
------------ -------------------
Total property and equipment, net. . . . . . . . . . . . . . 25,580 30,632
------------ -------------------
$ 59,659 $ 57,764
============ ===================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses. . . . . . . . . . . . . $ 229,101 $ 237,660
Short-term note payable. . . . . . . . . . . . . . . . . . . . 187,500 -
Notes payable to officers. . . . . . . . . . . . . . . . . . . 40,000 -
------------ -------------------
Total current liabilities. . . . . . . . . . . . . . . . . . 456,601 237,660
------------ -------------------
Long-term liabilities:
Convertible note payable, net of unamortized discount
of $174,999 and $204,166 at March 31, 2000 and
December 31, 1999, respectively. . . . . . . . . . . . . . . 158,334 129,167
------------ -------------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 614,935 366,827
------------ -------------------
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value; 5,000,000 shares
authorized; no shares issued and outstanding . . . . . . . . - -
Common stock, $0.001 par value; 100,000,000 shares
authorized; 31,396,250 and 31,394,250 shares issued and
outstanding at March 31, 2000 and December 31, 1999,
respectively (including 0 and 108,750 shares committed and
not issued at March 31, 2000 and December 31, 1999,
respectively). . . . . . . . . . . . . . . . . . . . . . . . 31,397 31,395
Additional paid-in capital . . . . . . . . . . . . . . . . . . 1,117,924 958,376
Deficit accumulated during the development stage . . . . . . . (1,704,597) (1,298,834)
------------ -------------------
Total stockholders' deficit. . . . . . . . . . . . . . . . . (555,276) (309,063)
------------ -------------------
$ 59,659 $ 57,764
============ ===================
</TABLE>
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INTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF OPERATIONS
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FEBRUARY 4, 1999
THREE MONTHS (DATE OF
ENDED INCEPTION)
MARCH 31, THROUGH
2000 MARCH 31, 2000
------------ ----------------
Revenues . . . . . . . . . . . . . . . . . . . . . . $ 12,227 $ 54,227
Cost of revenues . . . . . . . . . . . . . . . . . . 8,538 41,847
------------ ------------
Gross profit . . . . . . . . . . . . . . . . . . . . 3,689 12,380
------------ ------------
Operating expenses:
General and administrative . . . . . . . . . . . . 301,986 906,584
Payroll and related. . . . . . . . . . . . . . . . 59,489 254,243
Advertising and related. . . . . . . . . . . . . . 3,936 470,183
Depreciation . . . . . . . . . . . . . . . . . . . 5,052 9,669
------------ ------------
370,473 1,640,679
------------ ------------
Loss from operations . . . . . . . . . . . . . . . . (366,774) (1,628,299)
Interest expense, net of interest income of $133 and
$1,967, respectively . . . . . . . . . . . . . . . 38,989 75,498
------------ ------------
Loss before provision for taxes. . . . . . . . . . . (405,763) (1,703,797)
Provision for taxes. . . . . . . . . . . . . . . . . - 800
------------ ------------
Net loss . . . . . . . . . . . . . . . . . . . . . . $ (405,763) $(1,704,597)
============= ============
Basic and diluted net loss per common share. . . . . $ (0.01) $ (0.06)
============= =============
Basic and diluted weighted average common
shares outstanding . . . . . . . . . . . . . . . . 31,395,050 29,705,238
============ =============
</TABLE>
4
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NTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
INTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
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THREE MONTHS ENDED FEBRUARY 4, 1999
MARCH 31, (DATE OF INCEPTION) THROUGH
2000 MARCH 31, 2000
-------------------- -----------------------------
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . $ (405,763) $ (1,704,597)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization. . . . . . . . . . . . 34,219 68,002
Value of shares issued for services. . . . . . . . . 1,750 260,908
Value of beneficial conversion in connection with a
consulting agreement . . . . . . . . . . . . . . . - 15,000
Estimated fair market value of warrants issued for
services . . . . . . . . . . . . . . . . . . . . . 157,800 157,800
Write-off of note receivable to stockholder. . . . . - 10,000
Changes in operating assets and liabilities:
Inventories. . . . . . . . . . . . . . . . . . . . (1) (22,705)
Other current assets . . . . . . . . . . . . . . . (521) (1,173)
Accounts payable and accrued expenses. . . . . . . 6,441 229,101
-------------------- -----------------------------
Net cash used in operating activities. . . . . . . . . (206,074) (987,664)
-------------------- -----------------------------
Cash flows from investing activities:
Issuance of note receivable to stockholder . . . . . . - (10,000)
Purchases of property and equipment. . . . . . . . . . - (35,248)
Cash paid for transaction costs. . . . . . . . . . . . - (125,000)
-------------------- -----------------------------
Net cash used in investing activities. . . . . . . . . - (170,248)
-------------------- -----------------------------
Cash flows from financing activities:
Proceeds from sale of common stock . . . . . . . . . . - 616,250
Payments for redemption of common stock. . . . . . . . (15,000) (15,000)
Issuance of costs of shares sold . . . . . . . . . . . - (120,637)
Proceeds from short-term note payable. . . . . . . . . 187,500 187,500
Proceeds from notes payable to officers. . . . . . . . 40,000 40,000
Proceeds from convertible note payable . . . . . . . . - 200,000
-------------------- -----------------------------
Net cash provided by financing activities. . . . . . . 212,500 908,113
-------------------- -----------------------------
Net change in cash . . . . . . . . . . . . . . . . . . . 6,426 (249,799)
Cash at beginning of period. . . . . . . . . . . . . . . 3,775 -
Cash acquired. . . . . . . . . . . . . . . . . . . . . . - 260,000
-------------------- -----------------------------
Cash at end of period. . . . . . . . . . . . . . . . . . $ 10,201 $ 10,201
==================== =============================
</TABLE>
5
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INTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
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THREE MONTHS ENDED FEBRUARY 4, 1999
MARCH 31, (DATE OF INCEPTION) THROUGH
2000 MARCH 31, 2000
------------------- ----------------------------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . $ - $ -
=================== ============================
Income taxes. . . . . . . . . . . . . . . . . $ - $ -
=================== ============================
</TABLE>
6
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INTERNET GOLF ASSOCIATION, INC. AND SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
-------------------------------------------------------------------
PRINCIPLES
----------
Management's Representation
----------------------------
The financial statements included herein have been prepared by Internet Golf
Association, Inc. and subsidiaries (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information normally included in the financial statements prepared in accordance
with generally accepted accounting principles has been omitted pursuant to such
rules and regulations. However, the Company believes that the disclosures are
adequate to make the information presented not misleading. Interim results for
the comparable period in 1999 are not presented as the Company had no
substantive operations prior to its reorganization on May 7, 1999. It is
suggested that the financial statements be read in conjunction with the audited
financial statements and notes for the fiscal year ended December 31, 1999
included in the Company's amended registration statement on Form SB-2 filed with
the Securities and Exchange Commission on May 2, 2000. The interim results are
not necessarily indicative of the results for the full year.
Development Stage Company
---------------------------
The Company has been in the development stage since its formation. During the
development stage, the Company is primarily engaged in raising capital,
obtaining financing, advertising and promoting the Company and administrative
functions along with developing the interface and related web site
(www.igalinks.com). The Company will host state-of-the-art online interactive
multimedia golf tournaments via an online interface with Access Software's Links
LS '99. This site will allow golf enthusiasts to compete in interactive,
multi-media, PGA-style golf tournaments over the internet for potential cash
prizes and access a variety of related products and services.
Risks and Uncertainties
-------------------------
The Company is a start up company subject to the substantial business risks and
uncertainties inherent to such an entity, including the potential risk of
business failure.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course of
business. The Company's losses from operations through March 31, 2000 and
lack of operational history, among other matters, raise substantial doubt about
its ability to continue as a going concern. The Company intends to fund
operations through additional debt and equity financing arrangements which
management believes will be sufficient to fund its capital expenditures, working
capital requirements and other cash requirements through December 31, 2000.
There is no assurance the Company will be able to obtain sufficient additional
funds when needed, or that such funds, if available, will be obtainable on terms
satisfactory to the Company.
7
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NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
-------------------------------------------------------------------
PRINCIPLES, CONTINUED
----------------------
The future of the Company's operations depends in part on its continuing
alliance with Access Software, creator of Links LS '99 (the golf software
program the Company plans to use to provide the gameplay for the online
tournaments). The Company has no reason to believe that this alliance will not
continue; however, if it does not continue, it could have a significant adverse
effect on the Company's operations.
Principles of Consolidation
-----------------------------
The consolidated financial statements include the accounts of CVI Systems, Inc.
and IGAT, Inc., wholly owned subsidiaries and non-operating entities in their
development stages and Executive Golf Outings, LLC ("EGO"), a company that
organizes and hosts corporate golf events. All significant intercompany
balances and transactions have been eliminated in consolidation. Minority
interest related to EGO is not reported separately in the financial statements
as the amount is immaterial as of and for the period ended March 31, 2000.
Earnings Per Share
--------------------
The Company has adopted Statement of Financial Accounting Standards No. 128
("SFAS 128"), "Earnings Per Share." Under SFAS 128, basic earnings per share is
computed by dividing income available to common shareholders by the
weighted-average number of common shares assumed to be outstanding during the
period of computation. Diluted earnings per share is computed similar to basic
earnings per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. Because the Company has incurred net losses, basic and diluted loss
per share are the same as additional potential common shares would be
anti-dilutive.
Segment Information
--------------------
The Company has adopted Statement of Financial Accounting Standards No. 131
("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information." SFAS 131 changes the way public companies report information
about segments of their business in their annual financial statements and
requires them to report selected segment information in their quarterly reports
issued to shareholders. It also requires entity-wide disclosures about the
products and services an entity provides, the material countries in which it
holds assets and reports revenues and its major customers. As the Company is
currently in the development stage, the Company does not yet have any reportable
segments.
8
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NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
-------------------------------------------------------------------
PRINCIPLES, CONTINUED
----------------------
Recent Accounting Pronouncements
----------------------------------
The FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities on the balance sheet at their fair value. This
statement, as amended by SFAS 137, is effective for financial statements for all
fiscal quarters of all fiscal years beginning after June 15, 2000. The Company
does not expect the adoption of this standard to have a material impact on its
results of operations, financial position or cash flows as it currently does not
engage in any derivative or hedging activities.
In March 2000, the Emerging Issues Task Force ("EITF") reached a consensus on
Issue No. 00-2 "Accounting for Web Site Development Costs" to be applicable to
all web site development costs incurred for the quarter beginning after June 30,
2000. The consensus states that for specific web site development costs, the
accounting for such costs should be accounted for under AICPA Statement of
Position 98-1 (SOP 98-1), "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." Accordingly, certain web site
development costs which are presently being expensed as incurred, will be
capitalized and amortized. The Company has not yet assessed the potential
effect of the adoption of EITF Issue No. 00-2 on the financial statements.
Reclassification
----------------
Certain reclassifications have been made to the February 4, 1999 (date of
inception) through March 31, 2000 financial statements in order to conform to
the classification used in the current quarter.
NOTE 2 - NOTES PAYABLE
--------------------------
Short-Term Note Payable
-------------------------
On January 12, 2000, the Company borrowed $187,500 for working capital purposes
from a third party. The note requires monthly interest payments of 8%, with all
unpaid principal and accrued interest due June 1, 2000. During the quarter
ending March 31, 2000, $3,288 of interest expense was recognized.
9
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NOTE 2 - NOTES PAYABLE, CONTINUED
--------------------------------------
Notes Payable to Officers
----------------------------
In March 2000, the Company borrowed $40,000 for working capital purposes from
its officers. The notes require monthly interest payments of 8% with all
unpaid principal and accrued interest due on demand.
NOTE 3 - STOCKHOLDERS' EQUITY
---------------------------------
On January 3, 2000, the Company issued warrants to purchase 40,000 shares of the
Company's common stock to outside consultants pursuant to various agreements.
The warrants, which have exercise prices ranging from $1.83 to $2.00, vest
immediately and are exercisable through January 1, 2002. During the quarter
ended March 31, 2000, $8,200 of SFAS 123 expense was recognized.
On March 1, 2000, the Company issued warrants to purchase 19,000 shares of the
Company's common stock to outside consultants pursuant to a consulting
agreement. The warrants, which have an exercise price of $2.00, vest
immediately and are exercisable through March 1, 2002. During the quarter ended
March 31, 2000, $9,600 of SFAS 123 expense was recognized.
On February 24, 2000, the Company issued 2,000 restricted shares and warrants to
purchase 200,000 shares of the Company's common stock to directors. The
warrants, which have an exercise price of $1.00, vest immediately and are
exercisable through February 24, 2002. During the quarter ended March 31, 2000,
$1,750 of expense for the stock issuance and $140,000 of SFAS 123 expense for
the warrant issuance was recognized.
10
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ITEM 2. PLAN OF OPERATION
CAUTIONARY STATEMENTS:
This Quarterly Report on Form 10-QSB contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The Company intends that such
forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Quarterly Report contains forward-looking statements
regarding the financial condition, operating results, business prospects or any
other aspect of the Company, please be advised that the Company's actual
financial condition, operating results and business performance may differ
materially from that projected or estimated by the Company in forward-looking
statements. The differences may be caused by a variety of factors, including
but not limited to adverse economic conditions, intense competition, including
intensification of price competition and entry of new competitors and products,
adverse federal, state and local government regulation, inadequate capital,
unexpected costs and operating deficits, increases in general and administrative
costs, lower sales and revenues than forecast, loss of customers, customer
returns of products sold to them by the Company, termination of contracts, loss
of supplies, technological obsolescence of the Company's products, technical
problems with the Company's products, price increases for supplies, inability to
raise prices, failure to obtain new customers, litigation and administrative
proceedings involving the Company, the possible acquisition of new businesses
that result in operating losses or that do not perform as anticipated, resulting
in unanticipated losses, the possible fluctuation and volatility of the
Company's operating results, financial condition and stock price, inability of
the Company to continue as a going concern, losses incurred in litigating and
settling cases, adverse publicity and news coverage, inability to carry out
marketing and sales plans, loss or retirement of key executives, changes in
interest rates, inflationary factors and other specific risks that may be
alluded to in this Quarterly Report or in other reports issued by the Company.
In addition, the business and operations of the Company are subject to
substantial risks that increase the uncertainty inherent in the forward-looking
statements. The inclusion of forward-looking statements in this Quarterly
Report should not be regarded as a representation by the Company or any other
person that the objectives or plans of the Company will be achieved.
COMPANY OVERVIEW
Internet Golf organizes and conducts interactive golf tournaments on the
internet. Through our web site, which became operational in May 1999 and which
is located at www.IGALinks.com, persons interested in participating can become a
-----------------
member of the Internet Golf Association, also called the IGA. Once a member,
participants can enroll in one or more virtual golf tournaments and, if their
score is good enough relative to other members playing in the same tournament,
potentially win cash prizes. To date we have held two test tournaments on our
web site.
On February 4, 1999, our founders formed Internet Golf Association, Inc. in
the State of Nevada for the purpose of organizing and hosting internet based,
interactive golf tournaments. On May 7, 1999, Internet Golf Association, Inc.
was acquired by another Nevada corporation named Champion Ventures, Inc.
Champion had previously been in several different industries, most recently
mining, but had no significant operations for the three years prior to their
acquisition of us. Immediately following the transaction, our founders owned a
majority of the outstanding stock of Champion, and thus had control of Champion.
For accounting purposes we recorded the transaction as a reverse acquisition
whereby Internet Golf Association, Inc. was treated as having acquired Champion.
Following the transaction, Champion changed its name to Internet Golf
Association, Inc., and the former Internet Golf Association, which is now a
wholly-owned subsidiary of Champion, changed its name to IGAT, Inc.
The material steps in the organization and development of our business
during the next twelve months (assuming receipt of adequate funding) include the
following:
* Complete the functionality of our web site;
* Form new strategic alliances in the golf industry to enhance our golf
portal and improve our name recognition in the golf industry;
* Develop and subsequently increase our advertising revenues; and
* Increase IGA memberships.
These steps involve substantial risk to our business. The biggest risks
to our Company's success involve the potential inability to generate sufficient
members for our site which would make generation of advertising revenues
difficult or impossible.
11
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RESULTS OF OPERATIONS
Internet Golf has been in its development stage since its inception on
February 4, 1999. Since the Company had no operations prior to the May 7, 1999
combination with Champion, there are no corresponding results for the period
ended March 31, 1999 for comparison purposes. From inception through March 31,
2000, Internet Golf has generated $54,227 in gross revenues with gross profit of
$12,380.
Operating expenses and costs for the three month period ended March 31, 2000
were $370,463 and consisted primarily of payroll and general and administrative
expenses. The net loss for the quarter ended March 31, 2000 was $405,763.
FINANCIAL CONDITION
Our financial statements at December 31, 1999 include an auditors' report
containing a modification regarding an uncertainty about our ability to continue
as a going concern. Our financial statements also include an accumulated
deficit of $1,704,597 as of March 31, 2000 and other indications of weakness
in our present financial position.
As of March 31, 2000, Internet Golf had assets of $59,659, consisting
primarily of cash of $10,201, inventories of $22,705, and property, plant and
equipment of $25,580.
Liabilities consist of accounts payable and accrued expenses of $229,101
and a long term convertible note (net of unamortized debt discount) of $158,334.
We anticipate that the holder of the convertible note will convert it to common
stock.
Stockholders' deficit consists of common stock of $31,397 (31,396,250
shares at $.001 par value), and additional paid-in capital of $1,117,924, offset
by an accumulated deficit of $1,704,597.
LIQUIDITY AND CAPITAL RESOURCES
To date Internet Golf has financed its operations through the sale of
securities in private placements to investors, which to date have totaled
$616,250 in gross proceeds to Internet Golf, as well as a convertible note of
$200,000 from an unaffiliated investor, a note from another unaffiliated
investor for $187,500, and loans from officers of $40,000.
Internet Golf had cash of $10,201 as of March 31, 2000.
For the three month period ended March 31, 2000, Internet Golf used cash of
$206,074 for operations, and was provided cash of $212,500 from financing
activities (from the proceeds of a short term note of $187,500 and a note
payable to an officer of $40,000 offset by payments for redemption of common
stock of $15,000).
Internet Golf presently has no outstanding commitments for material capital
expenditures.
On January 12, 2000, we entered into a promissory note with Alster Finance,
an unrelated entity. Alster invested $187,500 in Internet Golf in the note.
The note is unsecured, and is payable in one payment together with accrued
interest at 8% per annum on or before March 1, 2000. The due date for the note
was extended to June 1, 2000 by Alster.
At our current level of cash expenditures, our cash needs can be met from
existing resources (assuming no substantial cash inflow from operations) through
June 30, 2000. If we are successful in selling the minimum amount of stock in
a proposed public offering of our stock which commenced in May 2000, our cash
needs would be met for a period through December 31, 2000. If we are successful
in selling the maximum amount of stock in that offering, our cash needs would be
met for a period of at least 18 months. If we are unable to sell the stock in
the proposed offering, we would be required to seek alternative financing to
remain in business. That financing could include debt or equity offerings.
12
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company may from time to time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business. The
Company is not currently involved in any such litigation that it believes could
have a materially adverse effect on its financial condition or results of
operations.
ITEM 2 - CHANGES IN SECURITIES
On January 3, 2000, the Company issued warrants to purchase 40,000 shares of the
Company's common stock to outside consultants pursuant to various agreements.
The warrants, which have exercise prices ranging from $1.83 to $2.00, vest
immediately and are exercisable through January 1, 2002.
On March 1, 2000, the Company issued warrants to purchase 19,000 shares of the
Company's common stock to outside consultants pursuant to a consulting
agreement. The warrants, which have an exercise price of $2.00, vest
immediately and are exercisable through March 1, 2002.
On February 24, 2000, the Company issued 2,000 restricted shares and warrants to
purchase 200,000 shares of the Company's common stock to directors. The
warrants, which have an exercise price of $1.00, vest immediately and are
exercisable through February 24, 2002.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders for a vote during the period
covered by this report
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27.1 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERNET GOLF ASSOCIATION, INC.
By /s/ Vincent Castagnola
----------------------------------
Vincent Castagnola
President & CEO
Dated: June 1, 2000
14
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